Initially, we set out to write a synopsis article on Gen Z’s positively altruistic consumer behaviors, how the polls reportedly speak about what engages them as consumers, and their supposed desire to only support brands and products that are ethically sourced. But once it’s discovered exactly where Gen Z spends the bulk of their clothing budget–Shein and other fast-fashion companies that dominate the retail landscape–it’s clear that our initial findings didn’t pan out.
NEW YORK–Initially, we set out to write a synopsis article on Gen Z’s positively altruistic consumer behaviors, how the polls reportedly speak about what engages them as consumers, and their supposed desire to only support brands and products that are ethically sourced. But once it’s discovered exactly where Gen Z spends the bulk of their clothing budget_Shein and other fast-fashion companies that dominate the retail landscape–it’s clear that our initial findings didn’t pan out.
Let’s ask ourselves: Which companies make things ethically, service trends, and also hit a retail price of $7.49 for a trendy top—and on top of that feature extended size offerings in nearly every category. The answer is very few large companies.
This top, by supplier Musera, currently featured on shein.com is identified as a best-seller.
But let’s break down the speculative labor, quality, logistics, an margin costs–all elements that factor into a retail price for this garment. This top has at least three panels, side seams, and four ribbon-string center front ties. This is not a top that is assembled in 10 minutes, and we’re not even addressing the time it takes to get all the materials onto the factory floor. Margin goals for retailers like this are anywhere from 60 to 85 percent. So at least $4 is for margin (which accounts for logistics, marketing, sales, profits, etc.). The labor and cost of goods to produce this top are going to be split across $3 (includes all material, supply chain, hang tag and packaging materials). Let’s ask ourselves: Do we think that a top that costs $3 to make is going to be ethically produced? And by “ethically produced” we mean companies paying a fair labor cost and using nontoxic, quality materials.
Nope. It’s just not possible.
The next factor is extended sizing. Having a collection that services sizes XXS–24 essentially means you are fitting, prototyping, and costing out three different collections. These are three different body types (fit on three different fit models), with three different fit and development processes (1–2 sets of prototypes each), with three different cost-of-goods. As you may imagine, the consumption (i.e., amount of fabric needed to make a garment) is also different across each size category.
The cost of making extended sizing is significant, and very few brands can actually afford to do it. However, Shein, an absolute behemoth in the industry, and others are able to do this by ignoring ethical labor and environmental practices, funded by extremely successful consumerism. That said, we can’t ignore that Shein and their fast-fashion counterparts are in fact filing a need: bringing affordable luxury to the masses .After all, everyone deserves to feel like they can have clothing options that make them feel good at a price point that won’t strain their budgets.
Another brand that come to mind, however, is Eloquii, a company that often markets through “influencer hauls” on TikTok. They cater to a Gen Z consumer and specifically to the plus-size market. They were also a former client of Angora Group; we introduced them to more elevated factories for their fashion collaborations–the first one being with the Teresa Macappani Missoni, the granddaughter of the founder of Missoni. However, their prices start at $65 (on sale), with much of the rest of the assortment selling at prices averaging at $85-$150 per garment. And trust us when we say this is a very competitive price point. It’s just not $7.49.
With Gen Z also being the most cost-sensitive generation, we have to ask ourselves if the retailers that are offering trends at the most economical price are servicing a white space that other brands are not. So the question to ask is: What is more important? The trend, the acquisition, or the impact driven proposition? What’s clear is that despite wanting to be altruistic in their loyalty–standing by a brand that produces things the right way–this is still a trend-based, cost-sensitive generation.
This poses the biggest conflict, because now more than ever before in the history of manufacturing–due to an increase in costs, overseas development, tight calendars, and the speed required to keep appeasing a demanding content-addicted client base–has the divide between IMPACT and AFFORDABILITY been further apart?
In order to tackle this, we need to skip the polls, trend reports, or consumer testimonials–instead, we need to follow the money. The ranking of the highest earners are undoubtedly the fast-fashion giants like Shein, Zara and Forever 21. Shein and Spark Group, Forever 21’s holding company, each acquired a piece of each other late last year–a major indication that Shein wants to open brick-and-mortar stores and capture what is undoubtedly the most important metric for Gen Z’s consumption motivator: experiential. To sell online is to compete with every other ad on social media; to sell in a store is to have a consumer’s complete attention, at least for the span of the purchase, and that, to quote Mastercard, is priceless. (The irony is that Gen Z will likely not get this reference.)
We wanted to delve deeper into the Gen Z consumer behavior, so we did our own sample survey. Although small and thoroughly nonscientific, the survey indicated that when Gen Z shoppers are put on the spot, they recoil and don't want to be called out for wasteful behavior.
According to Archrival’s report, featured in Vogue, despite their reputation as digital natives, Gen Z shoppers still value in-person experiences. Bricks-and-mortar stores are an important component in their fashion and beauty consumption. 73 % of Gen Zs prefer making a purchase in store while shopping, versus the 27% of Gen Zs who prefer to make a purchase on social media. And while online rules for inspiration, 68% of Gen Zs prefer to try before they buy (versus 61% of millennials). Just 32% prefer to buy without trying. However, typically, they conduct in-depth online research before making the purchase in store.”
Gen Z is particularly interested in this type of transparency and authenticity. Angora Group’s conducted an informal, narrow survey of Gen Z shoppers were asked 14 key questions related to how and where they shop. We learned that our sample group did not crave shopping or buying mindlessly, correlating with the study above, which cited a higher rate of researching a product before a final purchase was made. This small sample set indicated that they didn’t buy according to trends, rather, they cared more about fabric and comfort.
They also didn’t show a distinct focus on recycled fibers or country of origin. They shop equally online as in person; they all shop vintage as much as possible, because they don’t want to buy only new clothing. They try to avoid fast-fashion brands. And, according to Archrival, statistically speaking, Gen Z, more than any other generation, hates being targeted on social media by ads. This is a very important fact that we want to come back to later in future studies.
We also discovered that Gen Z shoppers increasingly care about and research the brand they are buying. One motivating factor? Finding out if the brand is fast fashion. The respondents who researched brands generally did not like fast-fashion brands due to waste. These conscientious shoppers don’t want to support companies that produce in short timelines and sell too many styles in one year, because they associate lower-quality and cheaper fabric with this type of manufacturing. Over 50 percent of our respondents said that they care about the fabric used in their clothes. Their answers for why varied widely from comfort to preferring natural fibers over fibers derived from petrochemicals. But most revealing is that Gen Z is polling more thoughtfully (and differently) than how they are actually shopping.
We are very much looking forward to seeing how the shopping habits and priorities of Gen Z evolve. We will be watching their consumer behavior closely for the next year, but ultimately we are even more interested in Generation Alpha (children born from 2010–2024), as we feel they will be game changers and disrupters in all sorts of ways.
Stay tuned.
